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In 2000 the United States Geological Survey estimated that up to 15 billion barrels of recoverable oil might lie beneath the coastal waters of Suriname and neighboring Guyana. (Photo: Courtesy Staatsolie Public Relations) more >

Some of the world’s top oil companies are betting that the next big oil discovery will be in the offshore waters of Suriname a small former Dutch colony on the northeast coast of South America.

Billions of barrels of crude are thought to be buried beneath Suriname’s shallow coastal waters and offshore in deep water. Where is it exactly? Somewhere within a 93,000-square-mile area of the Atlantic Ocean just offshore from Suriname. Exploratory activities by several oil companies started a few years ago and some are now poised to drill wells under production-sharing agreements with Suriname’s state oil company Staatsolie Maatschappij Suriname N.V. (Staatsolie).

The offshore area thought to hold a vast reservoir of oil is virtually unexplored, with only some two dozen exploration wells having been drilled there. Though the results were disappointing, anticipation is nevertheless building over the possibility of a big discovery, now that some drilling is about to start following extensive exploration and analysis.

Staatsolie has long believed a mother lode of crude oil was buried offshore. In the past few years, it devised production-sharing agreements to attract private and state-owned oil companies to Suriname; they subsequently came from every corner of the world, making bids for the right to explore and drill in vast offshore blocks mapped out by Staatsolie. By doing this, Staatsolie has minimized its financial risk while retaining the option to participate in the development and production of commercially exploitable wells, usually with stakes of up to 20 percent.

Among the companies that have joined Staatsolie in the search for an offshore “El Dorado”: U.S. giant Chevron Corporation; Britain’s Tullow Oil; Spain’s Repsol S.A and CEPSA; Japan’s Inpex Corporation; Malaysia’s Petronas; Murphy Oil Company of El Dorado, Arkansas; Dallas-based Kosmos Energy; and Houston-based Apache Corporation. Altogether, Staatsolie has some ten production-sharing agreements.

Staatsolie’s own exploration surveys were not the only thing that piqued the interest of these oil companies, however. Geologists in the oil-industry have long regarded Suriname’s offshore area as potentially rich with oil. In 2000, for instance, the United States Geological Survey estimated that up to 15 billion barrels of recoverable oil might lie beneath the coastal waters of Suriname and neighboring Guyana. And in 2011, an oil discovery in the waters off French Guiana was described by oil-industry experts as a potential “game changer” for the region’s oil-producing landscape.

“The planned offshore drilling activity is part of Staatsolie’s long-term strategy for discovering new reserves,” noted Marc Waaldijk, Managing Director of Staatsolie. Oil is one of the hot sectors in the four-year-old government’s ambitious development plans for the nation of 542,000 people.

In next year’s Q2, shallow-water drilling is projected to start in a coastal area of mud, mangroves, and water running 80-feet deep. Nine wells will be drilled to a depth of 2,000 feet in a project involving Staatsolie, Well Services Petroleum Co. Ltd. of Trinidad & Tobago, and Paradise Oil Company, a Staatsolie subsidiary that is managing the project. The site is near an oil field that has provided heavy crude since the 1980s. Offshore blocks in deep water, however, are where it’s thought a game-changing oil discovery may be found. Some drilling is expected to begin in those areas in 2015.

Among production-sharing projects in deep-water sites:

•Chevron Global Energy Inc. has a 50 percent stake in two blocks with Kosmos Energy. Kosmos is operating the blocks during the exploration phase. If commercially exploitable discoveries are made, Chevron will acquire the remaining 50 percent interest and operate the site. “This agreement enables us to explore for new resources in this frontier basin,” said George Kirkland, vice chairman of Chevron Corporation, in a news release. “These blocks are on trend with new deep-water Cretaceous discoveries in the region.”

•Malaysia’s Petronas has a production-sharing agreement with Staatsolie in an offshore block 80 miles off Suriname’s coast. Petronas invested $25 million to drill at least one exploratory well and conduct a three-dimensional seismic survey. If Petronas makes a commercially exploitable discovery, its exploration costs will be reimbursed, and Staatsolie will have the option to participate with a 20 percent stake.

•Britain’s Tullow and Norway’s Statoil are investing $35 million to explore a block located some 124 miles off Suriname’s coast. The partners will gather three-dimensional seismic data and study it along with data from Staatsolie. If a commercially exploitable well is found, Staatsolie has the option to participate in development and production with a stake of up to 20 percent. Tullow is operating the block; it also has stakes in two other offshore blocks.

•Apache invested $230 million to explore a block some 80 miles off Suriname’s coast. It will be reimbursed if commercial production begins; Staatsolie has the option of taking up to a 20 percent stake in the project’s development stage. Early next year, Apache expects to start exploratory drilling. A CESPA subsidiary has a 25 percent stake in the block.

• This article was produced in conjunction with The Washington Times International Advocacy Department.